Together, Struggling Firms Have The Stamp Of Success

A Happy Ending And Beginning - For Partners Who Matched Wits To Produce A Winning Product

July 10, 1995|By JAN NORMAN Orange County Register

SANTA ANA, Calif. - — Mario Rodriguez lost out to a bureaucratic decision. Toby and Barbara "BeeGee" Erlinger lost out to recession.

Together, they're winning.

The best business deals are win-win situations. This is a tale of just such a deal. It may prove instructive for other small-business owners who find themselves a run behind with two outs in the bottom of the ninth.

He has a license to make enamel versions of U.S. postage stamps. Business was brisk until the Postal Service decided in 1991 not to sell such products in its post offices anymore.

Faced with the expense of developing alternative sales outlets, about two-thirds of the 75 postal licensees went out of business.

Rodriguez was stuck with $390,000 in pin inventory and $100,000 in dies.

About the same time, the recession virtually halted all business for the Erlingers' real estate-development company.

They had a full, 150-unit apartment complex that within six months had 50 vacancies, Barbara said.

The Erlingers didn't relish the idea of going back to work for others, so Toby came up with an idea of producing and selling golf-ball markers.

"A company won't survive on just one product," warned consultant Jackirae Sagouspe of IDT Marketing and Sales in Anaheim.

In search of a contract manufacturer, Toby stumbled upon Jonathan Grey. When he saw the warehouse full of unsold stamp pins, his mind started to race.

You can't appreciate how many products Rodriguez is licensed to sell until you flip through the 432 pages of the Postal Service Guide to U.S. Stamps. These slips of paper depict doctors, lawyers, Indian chiefs. Babe Ruth and Bobby Jones. Elvis and Norman Rockwell. Love and Christmas and red AIDS ribbons.

Rodriguez has about 900 designs in his inventory.

For the Erlingers, real estate had required high upfront investment. This time around they wanted a business that responded to orders, keeping inventory small and initial costs low.

First the Erlingers thought they could sell some pins depicting golfing great Bobby Jones. Hey, it's in line with ball markers, right?

Then they warmed to the challenge. Why not put stamp pins on money clips and cuff links and call them "Stamp-links."

And how about bolo ties, key chains and letter openers?

Buyers could choose any of the stamp pins as decoration.

And how about making ornaments out of these Christmas stamps (the Postal Service has about 20 designs) and putting them on greeting cards?

"There was no limit, other than our imagination," Barbara said.

All these different products didn't solve Rodriguez's need to find new markets to avoid a huge write-off.

But the Erlingers, who called their new venture Giftpreneurs, were also brainstorming about potential customers for their new products.

They hooked up with 50 sales representatives nationwide and started taking their samples to gift shows and corporate trade shows.

F.A.O. Schwarz and Smithsonian put some of the products in their 1994 catalogs. Mail order has quickly become 25 percent of sales.

Many stamps depict specific professionals, such as pharmacists and CPAs, so Giftpreneurs pitched its wares to trade groups.

Last Christmas the Erlingers sold stamp-imbedded clocks to insurance agents for their clients. The agents could select different stamps to match clients' hobbies or professions.

Ironically, the Postal Service has become a big customer of Giftpreneurs' products, which are given as gifts or employee incentives.

Rodriguez, who used to work for the Postal Service, still has good contacts in the organization.

That relationship prompted Toby to dream up another product line that he hopes will become a multimillion-dollar seller.

The Postal Service practically wears a "kick-me" sign on its back. But after some research, Toby decided the nation's 750,000 postal workers ought to fight back. After all, they deliver a half-billion pieces of mail each day with an error rate of less than one-tenth of 1 percent.

The Erlingers seemingly have stepped far away from their construction roots.

But have they?

"It's amazing how close my work parallels what I used to do," Toby said. "I look for products to make. Before I looked for property. Now I line up T-shirt suppliers and plaque makers. Before I looked for lamps or plumbing fixtures."

Barbara agreed. "Each [industry) has a different language and product, but they have the same organization and thought process."

One aspect is different, she acknowledged.

"In real estate, you build for nine months or a year before you get rewarded. In this business, we make sales every day. It's fun every day."

Entrepreneurs ought to be on the lookout continually for these business relationships that can profit everyone, Rodriguez said.

These win-win situations are simple "because we all have the entrepreneurial spirit," he said.